The Improbability of PracticalityLeave a Comment
Recently, I did some work with an owner of a local company that has about 50 employees. As I was asking about their benefits, he mentioned that he had an Aflac agent who had been servicing the company for a couple of years in addition to the group health broker. The company owner seemed to like both the health insurance broker and the Aflac agent. There were a couple of employees who had made claims and received benefits, which definitely makes the risk feel more real to those who were not participating in any of the Aflac plans. This meant that the agent was able to get back in there and enroll more employees the next time he was through the door.
I have been thinking about some of my consulting clients who seem to have difficulty separating the client’s desire for information from their own. Some of my consulting clients are natural sponges of information. This is what attracted them to us in the first place. What I see happening sometimes is that we are focusing too much on information and not on how the client feels.
We all have clients who place a lot of value on the experience of learning something that they think they would not have learned from another salesman. In this regard, the scarcity of this information is what makes it valuable. But, once trust has been earned, spending more time getting deeper in the weeds gives you a diminishing return.
A client can only retain so much, so giving away more than a practical amount of information can end up reducing your chance to make the sale. This amount of information is different for everyone. Five minutes of education may be perfect for some clients where others need thirty minutes or more. I would contend that very few people ever want or need more than 45 minutes of solid information to decide to work with you. I personally try to limit the info dump to around 15 minutes.
But why do people really buy from you and keep on buying from you? They buy from you because of the way they feel when they interact with you. Maya Angelou said “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”
Did you know it has been proven that Doctors with good bedside manner have healthier patients? This is because anxiety is so bad for you. Doctors who you like, lower your anxiety and the ones you don’t like raise your anxiety.
So what is the best way to make your client feel? If someone pinned me down on it, I would tell them that i want my clients to feel at ease.
Remember though, that we want the clients to take action. It is our job to make that happen. So we want the client to feel at ease before, during and after taking action.
Empathy and The Golden Rule in Selling
I’ve been exploring the ideas of Empathy and The Golden Rule in selling. I think that the professional salesperson has to demonstrate one and abide by the other in order to have the right kind of career over a long period of time.
To be empathetic is to have the ability to feel what someone else is feeling or to recognize another’s emotions. This ability is essential to doing good business if you are in sales. The very best salespeople are only inhibited by sales scripts because they have the ability to figure out each individual buyer. We all know the classic and very trite car salesman line…”What’s it going to take to get you into this car today?”… Well, the very best salespeople can see through the client’s eyes and walk in his or her shoes and thus could just ask “What would it take for me to buy this car today?”
There is a perfect kind of language that raises the odds of selling to each individual person or couple. The most empathetic salespeople can figure it out. This comes naturally to some salespeople, but for others it must be studied. Just as a Psychologist spends 10 years in college to be able to relate to people, a salesman can study enough material to learn empathy. There are seemingly endless books on the subject. You have to be able to understand what your client is feeling in order to pick up on the subtle clues that are like a breadcrumb trail that leads you to the close.
So here’s the danger to the client. Some of the best salespeople can show empathy but be completely amoral. You know these kinds of salespeople, or at least you’ve seen them in movies like “Boiler Room,” “The Wolf of Wall Street” and “Glengarry Glen Ross.” If you haven’t seen these movies, go and watch them all. These people are real and they are out there folks. I once heard a guy say “I didn’t get in this business to save the world. I can do that when I have money.”
Empathy and The Golden Rule in Selling – Video
The most skilled salespeople can sell inferior products to clients. They can also sell a good product at an unfair price. What can happen is that a person can be so well trained at selling that the client would literally buy something that makes no financial sense. For example, my business is life insurance. I have worked with many clients over the years who bought policies for 30+% more than market cost even though the agent had access to lower prices for better products.
Let’s talk about why The Golden Rule is so important. As you hone your craft, you have to keep in mind that you must always do the right thing for the client. For some of us, it isn’t hard to always do the right thing. It just comes natural. Others might be tempted by greed. Some find ways of spinning their own truths or rationalizing to make themselves feel better about what they choose to sell. You may be able to get away with making a few sales this way, but it will catch up to you. A reputation of being a salesman of low character will directly affect your income in a way that you’ll never make up for with sales skill.
If you plan on making a career out of selling, you must blend these two important elements. You have to be able to understand what your client wants and needs and be able to convince them to buy. You also have to do so in the most scrupulous way. One without the other doesn’t work.
Perspicaciously Simple Speech
Does your sales pitch sound like mixture of Pig Latin and a Dennis Miller comedy rant? If so, you’re probably leaving business on the table. Keeping it simple is the key great communication.
Some salespeople insist on using every brain cell to craft the perfect sales pitch. They design explanations for the logic and reason that supports buying their product using YouTube footage from the 2012 Scripps National Spelling Bee. While it sounds great in their heads, essential information is not sinking in because the client’s brain is in turmoil.
One of my favorite clients is a well aged Italian fellow who is a no nonsense, shrewd, somewhat intimidating self made millionaire. About 10 years ago, I sold him the first of many insurance policies for his large estate planning need. Even then, I knew more than most, but prepared for several hours for the meeting so I could pull back the curtain to explain to him all about the inner workings of the policy options I was recommending. I also talked about ownership options, premium financing possibilities and the like. Thankfully, he liked me just enough not to boot me from his office but instead scolded me. “Stop!,” he said sternly, “I can tell you know what you’re talking about, but I’m not getting it. Start over and explain it to me like I’m a child.” Maybe I shouldn’t have put that in quotes since I edited all the swearing, but he was dead right. I felt about two feet tall after he snapped at me. I was wasting his valuable time. He really only needed to know the essentials. I gathered myself and gave him the info using simple language and sold him that first policy. From then on, our meetings rarely lasted more than 20 minutes because I condensed all the information for him into its simplest form. Wasting his time could have resulted in him changing agents or my waking to find a severed horse head in my bed, or both. I have learned a lot as I have worked with him and his family over the last several years and I value those lessons. Here are a few:
Drop the industry jargon. Just because the person across from you is nodding his or her head, that doesn’t mean they understand what you’re saying. If they leave to “think about it,” it might be so they can google some of the words you were using.
Use simple speech. There’s no reason to use big words in a sales meeting. It makes you sound like a phony. Studies have shown that those who use large academic words are regarded as having lower intelligence. In other words, trying to sound smart makes you sound stupid. By the way, Guetapens was the winning word in the 2012 National Spelling Bee. Ironically, Guetapens could be used as a metaphorical substitution for “Sales pitch.”
Focus on the result. Mr. Client, buying my product will make you happier, healthier and wealthier.
“If you can’t explain it to a six year old, you don’t understand it yourself.” – Albert Einstein
ROP Term, The Worst of all Life Insurance Policies
I think I will get a little flack from this, but I’m feeling the need to blow the whistle on a life insurance product that is still being pushed by a lot of insurance agents out there. I can find some positives in just about every kind of life insurance product, but right now, this is one that makes no financial sense. In the past, this product design had some merit for some people and I have seen it work and sold it myself. New insurance regulatory changes in actuarial guidelines have come through that make this product perform poorly. Today, this product only makes up about 2% of term insurance that is sold, but I think it would be much less if the consumer knew the math behind it.
First, let’s examine why a consumer would find it desirable enough to buy. In simple terms, loss aversion is the reason. When we hear the salesman say “How’d you like to buy an insurance policy that gives you back all your premiums if you don’t die?,” it’s like music to the ears. Naturally, this seems like a good deal and if the price is palatable, it could seem like the way to go. That’s only if you didn’t have the rest of the story. In a way, the sales line above is illustrative of the kind of doublespeak that gives life insurance salesmen a bad name. Let’s see the numbers first and then we’ll adjust the sales pitch a little and see how it sounds.
A 35 year old male can buy a $1,000,000 20 year level term policy at “Preferred” for about $600 per year. A Return of Premium product would be about $2,500 per year. At the end of 20 years, the entire $50,000 that was spent over that time would be returned to the policy owner. But, if we invest the $1,900 per year difference, we only have to earn a 2.8% return over 20 years to create the $50,000. If we achieve an 8% return with the same $1,900 per year over 20 years, we end up with $86,000. So what is the opportunity cost? On the surface, it looks like the opportunity cost is $36,000. But, that isn’t the whole story. In a ROP product, you have to make it to the end of the policy to get all your money back. So, if you change bank accounts and your policy lapses, then you’re just screwed out of most or all the money you put in there. You cannot actually calculate the opportunity cost of buying this type of policy, but it’s greater than just the interest rate difference. Some might argue that the return in these kind of policies is guaranteed, unlike stock market returns. This is true, but most who are buying this are in the younger ages and can take on the risk. Even those who are skeptical about the stock market can outdo the ROP’s guarantees with annuities from the same company that is selling the insurance policy.
I ran several scenarios and was able to find a few age/rate classes that could get the return into the low 3% range, over 20 and 30 years. Many were in the mid 2% ranges. I can’t see how inflation rate returns could ever be worth tying up any amount of money for that length of time.
Here’s the adjusted sales pitch.
“How’d you like to buy some well priced term insurance, plus tie up an extra $2,000 per year for the next 20 years at inflation rate returns, contractually guaranteed as long as you make that payment faithfully for the entire 20 years, otherwise we keep it.”
Have you met any of these young go getters with their do-it-yourself bow ties, new shoes, briefcases, and sunglasses dangling around their necks? Be careful Aunt Suzie. They’ll corner you and awkwardly fumble their way through their best attempt at a sales presentation and guilt might just drive you to buy a bad version of something you sort of need. How excited they must be, beginning their short lives in the “Financial Services” business through internships with the big boys of the Life Insurance business?
I’m sort of kidding. You’ll forgive me for my tone, won’t you? The tragedy is that these young men and women, if taught properly, could be our next generation of real professionals in insurance. And the industry needs them.
I don’t think it’s a secret that no more than 1 out of 10 people (of any age) succeed in the Life Insurance business. I recently read an article written by an AXA career agent who said he was one out of three remaining from a starting class of a thousand.
I see two major problems that are keeping these recruits from succeeding. The first problem is that these people get lured in under the guise of “Financial Services” meaning something other than Life Insurance. Eventually, they figure out that the future set for them is not making a fortune by managing multimillion dollar portfolios, but selling the same 3 life insurance products to everyone. By then, these agents have seeded their hierarchy with a few cases that will feed the beast for years to come. What bothers me is that the system is really set up this way on purpose. In other words, one of the marketing strategies of some companies is to recruit the family and friends of the eventual client.
The other thing that keeps new recruits from succeeding is that they have to start selling to clients too soon. What’s normal is on the job training where the new agent is sent out to set meetings with as many people as possible within the first couple of weeks of being licensed. Understandably the recruit fails to sell most attempts (other than Aunt Suzie). This is what I call the Win Win Weeding Process. The agencies are happy with the business they get and happy to have hired the few who make it. There needs to be a much longer training and mentorship program where the recently licensed agents can spend their time learning while getting paid fast food type wages. With few exceptions, I would say it would be smart for most new agents or financial advisers to stay away from clients for the first six months. This time should be dedicated to sponging up as much knowledge as possible. But, Imagine a recent college grad who is considering a career path. How would recruiting work if the only promise you could make is that as a new agent, you’ll barely scrape by for the next couple of years and then maybe begin earning a decent living and if you bust your ass, you’ll achieve a 6 figure income in around 5 years? That just wouldn’t gather much attention from most young people who are sick of ramen and ready for kobe beef. Well, this kind of dedication and suffering is good enough for doctors. Maybe that’s what these young people need to know.
Here are the facts. Life Insurance is a good business. You can be your own boss. Six figure incomes are the norm for people who stick it out and learn all they can.
Southern Charm and Getting Permission to Ask
By no fault of my own, I’m from the South. I try to dilute the accent a little but people can easily tell. I’m very lucky to have learned etiquette from my parents and grandparents. Let me explain how some of the most important rapport building skills are a natural part of southern culture.
I used to work for/with Tai Lopez, selling Life Insurance over the telephone and internet in one of his first business endeavors. We had a large volume of opportunities due to his marketing genius. Being less than a year into my career, I failed to sell many people who would be no problem for me now. I was quickly however, far and away the best producer out of a company of 17. The second best salesman at the time was my friend and business partner Brian Marshburn (also from the South). For Life Insurance salespeople, we were very young. We were in our early to mid 20’s at the time but we were doing very well, many times at the frustration of more seasoned and proven professionals. I recall many of my interactions with these clients very fondly. Sometimes people from up North would literally laugh at my accent and ask where I was from. They would also ask my age. Of course I would laugh along with them and continue to be nice. I would talk about how the the person I spoke with 10 minutes earlier had asked the same questions and how I try to mask my accent, but it must be in the DNA or some other light joke about being from the South. What I didn’t know at the time was that I was breaking down their wall with a very powerful and proven rapport building skill. Well, a couple, actually.
-Telling something embarrassing about yourself.
I am not at all embarrassed by being from the South, but joking with my new prospects about my struggles with my accent works at breaking down barriers.
-Smiling, Which is an Accommodating Non-verbal.
Though they couldn’t see me, if I was laughing, then I must have been smiling. Smiling works, whether across the table or over the phone. People can tell. Smiling is a staple of Southern Charm.
Once we got the jokes about my accent out of the way, I would give a little more background on my work experience and areas of expertise. I would typically tell them how long a call with me usually takes. Then I would ask permission to ask them a question. Like this: “Mr. Smith, may I ask you a question about the insurance you have now?” Two more things happened here.
-Establishing a Time Commitment.
This is a powerful and overlooked technique for putting your client at ease. If you tell your client that the call will usually take 30 minutes and it ends up being an hour, then your prospect will be thankful for the extra time.
-Ego Suspension or Just Plain Being Humble.
When you ask permission to ask a question, you are doing 2 things. You are reducing or maybe eliminating the risk of intrusion. Some questions can feel like an intrusion into your client’s private life, even when they’re pertinent to the conversation. You are also demonstrating thoughtfulness, which is also a sign or trustworthiness.
The next thing I would do is ask deepening questions. How? When? Why? What if? Then I would shut up and wait for the entire answer without ever interrupting, even if the prospect or client is off track. Interrupting is rude. In the south, we don’t like rudeness. Most salesmen interrupt because they are trying to “correct” their client. There is a better way to do that. I would let the client talk as long as he or she was willing and take a note on everything that I needed to go back and address. Then, only when they were done, I would go back to the key topic. Like This: “Mr. Smith, you said that your company is important to you, and you want your son to take your place in 5 years so you can retire. What if you could accomplish that in 3 years?… What would happen if it took 7 years?” You doing 2 more things here.
People can tell when you’re really listening, and not waiting for a chance to talk.
People want to be heard. By repeating back to them what you are hearing and exploring the topic with more deepening questions, you are validating feelings and thoughts. These things further build trust and importantly give you information you need to make a recommendation.
After I had all the information I needed make a recommendation and ask for the business, I would then educate the client, using plain speech. I would tell the client how insurance product worked and why. I would tell them what others have done in their situation and pull back the curtain in the insurance industry. I wanted them to feel like they knew more than any other consumer of Life Insurance. Like this: “Mr. Smith, most people don’t know how to do this, but we have a way of finding out if your old policy has higher mortality rates than a new one. We just have to call the insurance company and ask them to generate a report with that information on there. I can get them on the phone and do it now if you like.” Here is what you’re doing for the client.
Gift giving is a way of thanking your client for their time. In the South, “Please” and “Thank You” very important. Gifts do not have to come in the form or something physical. Educating someone is a good gift. Getting material from a client’s current company as above should come across as altruistic, even when it helps you sell something to your client.
After all this, which may have only taken 30 minutes, I would have had enough to make the sale. And the client was happy to offer me the business because they were getting a better experience from me than from any other insurance salesman they had encountered before me. Thankfully, much of the above came natural and I was able to provide a good income for my young family. Over the years, I have worked on these skills and many more that people in the insurance industry tend to ignore. Having these skills will set you apart from the rest. If these skills are taken seriously and are well practiced, even a 25 year old country boy from North Carolina can outsell scores of successful suit wearing career agents.
One more thing: All the stuff above works much better if you mean it.
Curiosity Killed the Cat?
Often as insurance agents, doctors, home builders or any other kind of professional, we accept the wisdom of others and put it to practice in our own businesses. This can be a good tactic if you have a great source of knowledge. In other words, you can always learn from peers in your business. You can especially learn from people who have been doing great work over a long period of time. You can also learn what not to do from others who are not experiencing the kind of success you want.
Why is this a good tactic? Efficiency is the answer. It is quicker to siphon off work skills from others, or plainly, to copy what other people are having success doing. You can get a great base of knowledge this way. A solid foundation of understanding is enough even to be able to get some good work done for your clients.
You can’t stop there though. In a changing world, you have to be curious enough to discover new things that work better. We, as humans, have a natural curiosity. It is somewhat suppressed by the education system (though not by individual teachers). “It is a miracle that curiosity survives formal education.” Albert Einstein We have to push past the urge to stop learning just because we are having success.
What if, as an insurance broker, you have a good base of knowledge in sales skill and product design and you understand the need for insurance for most of your clients? You could probably get business from as many as half the people you engage. You could make a pretty good living this way. Many agents do. How would your life be different if you knew more about insurance than any broker in your town? Your state? Couple that with being able to understand your buyer better than anyone else in your area. Now what would your life look like? You would sell to almost everyone you engage. This would mean more money for less work and professional satisfaction that is uncommon for any type of professional. You simply cannot get to this level without curiosity. That’s a good thing. Most of your competition is not willing to ask those “Why” questions like a 3 year old information sponging toddler.
Sometimes it takes a little reprogramming to get that curiosity back. You have to start with an understanding that there’s a lot you don’t know. Trust me, there’s a lot for everyone. Once your curious mind starts working again, quality information starts getting easier to find. When you start putting your newly acquired knowledge to practice, it can be incredibly rejuvenating, especially if you have had the same career for several years.
“Curiosity Killed the Cat?” What a ridiculous proverb!
Friends, For over 15 years, I have been developing and practicing a way of selling that is a blend of what I have read in books, learned from mentors and developed on my own through trial and much error. The result is a much higher than normal close rate. First let me tell you why I have intentionally spent so much time working on this.
My first job in insurance was as a captive agent. Puppy Mills of the Financial Service Business The sales manager had goal making session with me where he explained that in order to achieve my income goal, I would have to make 10 calls to schedule 3 meetings to make 1 sale. What that meant for me, based on a very modest average case size is that I would have to make about 40 warmly sourced phone calls per week to schedule 12 sales meetings to make 4 sales in order for my family to have a reliable income. Having no base of knowledge about insurance selling and very little aptitude, I was forced to take his word for it. So I started seeing clients and made a few sales. I determined within a few weeks that his numbers were pretty much spot on. Now I am not a very outgoing person, so it was very painful to make those calls and I was quickly running out of warm sources. I wondered how I could change the numbers in my favor. What if I could only call 5 or even less people to make one sale? I started trying to figure out what the reason was for people not buying from me. Quickly, I discovered that many of my prospects had bought insurance before and that they preferred to check my prices with the other agent first. Within a month, I determined that I was losing about 1 out of 4 opportunities due to price shopping. Since I wanted the client to have the best price and there was no way to solve this within the current company, I decided to get a job with an independent firm so that I could always win on price. OK, great progress, I thought. So, based on my original numbers, I now only had to make 33 phone calls per week. What If I could improve that further? I knew I was lacking in knowledge, and though they didn’t tell me, my prospects could tell that I was new in the business. They surmised correctly that I didn’t know very much about insurance compared to a seasoned agent. I figured I was losing another 1 out of 4 opportunities over lack of trust due to my inexperience. I couldn’t fault the client for their assessment, so I started pouring through every bit of written material I could get my hands on. Within a few months, I was like an insurance encyclopedia. There wasn’t a question about how insurance works that I couldn’t answer and most of the time answer better than an experienced agent. With this new knowledge, I started focusing on not only increasing my close rate, but my case size. What if I only needed to place 3 cases per week instead of 4? And so it went. With each thing I found to be a reason for failing, I improved. Within a few years I reached what I considered to be a real milestone. I completed a single insurance case where my commission was as much as my original annual production goal.
Over the last several months, I have been thinking about what I want for the next 15 years of my career. I determined that, to keep it fun and interesting, I have to keep innovating. Today, I have a platform that is near completion which I think will help 100’s or 1,000’s of agents get through those most painful months and years of grinding it out. It is a selling method that works for today’s buyer. http://www.brevityconsult.com Stay tuned. We will have something to show you this summer. (more…)